PREMIER Wen Jiabao said China must avoid an abnormal increase in bank lending at the beginning of this year and would continue to use various monetary policy tools to maintain a reasonable amount and pace of financing in the country.
The remarks, which Wen made at a Cabinet meeting Tuesday, highlighted the government s concern over a fast increase in lending, which adds pressure to the country s battle with inflation and asset bubbles. Chinese banks extended 7.95 trillion yuan (US$1.20 trillion) in loans last year, exceeding the official target of 7.5 trillion yuan.
China has taken various measures to slow lending growth as part of its efforts to combat inflation. On Friday, the central bank said it would raise the deposits banks must keep on reserve by half a percentage point, effective Thursday, after six such increases last year and two interest rate hikes since October.
The central bank has also decided to adopt different reserve requirement ratios for individual banks and will adjust the required level of reserves for each bank based on some indicators, such as its capital adequacy.
Wen said the government must keep consumer prices stable in the first quarter. He said China must maintain regulation of agriculture products procurement, guarantee the supply of fertilizer and stabilize the agri-products prices.
China would continue to firmly regulate the property market by curbing speculative purchases and increasing the supply of small and medium-sized homes, he said, urging governments at all levels to ensure the land supply for construction of affordable housing.
The government introduced several measures, such as higher down-payment requirements, last year to cool the overheating property market, while local governments have also imposed their own limits on home purchases.
Despite these moves, house prices remain out of reach for many ordinary Chinese. Property prices in 70 large and medium-sized cities rose 0.3 percent in December from the previous month and by 6.4 percent from December 2009, the National Bureau of Statistics said Monday.
(SD-Agencies)
